Monday, January 22nd, 2018

 

Global stock markets diverge amid US government shutdown

LONDON, Jan 22 — Global stock markets diverged today as investors stuck to the sidelines in face of the US government shutdown. While Wall Street opened lower, Europe’s main stock markets were mixed, with prices edging higher in Frankfurt…


IMF raises global growth forecasts, US tax cuts provide boost

WASHINGTON DC, Jan 22 — Global economies are recovering simultaneously and at a stronger pace, and will get at least a short-term boost from the US tax cuts, the International Monetary Fund said Monday. In the latest update to the IMF’s…


Ringgit could benefit from US govt shutdown

PETALING JAYA: The Greenback could potentially weaken in light of the political development in the United States, as the shutdown of government services moved into the third day, spelling good news for the ringgit.

FXTM Research Analyst Lukman Otunuga told SunBiz that the US Dollar could see further loses should the shutdown persist longer than expected as the currency “remains at the mercy of heightened political uncertainty”.

A weakened dollar will not only support the currencies of the emerging market including the local unit, but will also draw investors towards the international bond markets, which will also potentially boost the buying sentiment towards the ringgit.

The ringgit closed marginally higher at 3.933 against the dollar as at 5pm yesterday.

FXTM’s analysis entitled Investors, unmoved by the US government shutdown noted that financial markets appears to be immune to the political developments in US.

The report said although Asian equities traded slightly lower yesterday, the Japanese Yen and gold are flat. Remaining flat is an indication that traders are of the view that the “drama will be over soon.”

Otunuga noted that while responses from financial markets were fairly muted last week, the Malaysian equity market may also be benefiting from its positive economic growth amid a cautious backdrop.

“World shares were mostly mixed on Monday as investors simply discounted the political developments in Washington. While the Malaysian equity markets could be impacted by a sense of caution, the bullish sentiment towards the Malaysian economy could continue supporting the upside momentum,” he said.

Malaysian stocks have risen for eight consecutive weeks and could continue venturing higher amid optimism over steady economic growth,” he added.


GHL starts Alipay services in Philippines

KUALA LUMPUR: GHL Systems Bhd will offer Alipay payment acceptance services to in-stores merchants as well as online merchants in the Philippines.

The rollout will start with physical merchants this month and eventually extend to e-commerce merchants. Philippines marks the third Asean country after Malaysia and Thailand since GHL’s tie-up with Alipay to offer a next generation payment option to merchants.

GHL started merchant acquiring for Alipay in Thailand (Q2 2016) and Malaysia (Q2 2017) and to date, GHL Thailand has enabled over 900 merchant acceptance points. GHL Malaysia has enabled 5,400 acceptance points in hotel, retail chain stores, convenience stores and F&B space that has high Chinese tourist foot traffic.

Alipay is China’s leading mobile and online payment solution, owned by Ant Financial Services Group, a related company of the Alibaba Group.

For the first 10 months of 2017, 810,807 tourists from China visited the Philippines compared with the whole of 2016, which totaled 675,663 tourists. This is expected to increase further with the implementation of the Visa Upon Arrival program in the Philippines. This growth bodes well for Philippine businesses and merchants as Chinese tourists generally carry the Alipay mobile wallet.

GHL group CEO Danny Leong said: “We started with Alipay in 2016 in Thailand, Malaysia in April 2017 and now with the Philippines market, GHL looks to expanding further to the region as Alipay’s key Asean partner”.


MSM CEO leaves, claims ‘constructive dismissal’

PETALING JAYA: MSM Malaysia Holdings Bhd group’s president/ CEO by Datuk Mohamad Amri Sahari @ Khuzari has left the group claiming “constructive dismissal” 20 months into the job.

The group has appointed chief technical officer Mohd Shaffie Said as its new acting CEO, effective today.

In a statement, MSM said the appointment is following the vacation of office of the president and CEO.

MSM said the group had denied Mohamad Amri’s claim and requested him to return to work in accordance with the terms and conditions of service to discharge his roles and responsibilities as the president/ group CEO.

According to the group Mohamad Amri’s affirmed on Jan 19, 2018 that he will not return to work.

Mohd Shaffie retains his role as chief technical officer and project director of MSM Sugar Refinery (Johor) Sdn Bhd.

“MSM will continue business as usual and the board of directors together with the management stand firm in growing the business going forward,” the group added.

MSM fell two sen or 0.49% to RM4.06 with 11,400 shares traded.


ManagePay aims to launch money-lending business in April

PETALING JAYA: ManagePay Systems Bhd (MPay) is targeting to launch its money-lending business in April after receiving approval from the government.

The group told Bursa Malaysia today that its wholly owned subsidiary ManagePay Resources Sdn Bhd (MRSB) had on Jan 19 received a letter of approval (LoA) dated Jan 17 from the Moneylenders and Pawnbrokers Division of the Ministry of Urban Wellbeing, Housing and Local Government.

MPay said with the receipt of the LoA and after six months of preparation for fulfilling the requirements as specified in the conditional approval letter issued by the ministry, the group is now able to start the money-lending business targeting both individuals and businesses, over and above MPay’s Quickash Peer-to-Peer (P2P) financing platform, which was launched in September 2017.

“With these new added lending capabilities, which MPay targets to launch in April 2018, it will contribute to both revenue and bottom line of the company in year 2018.”

MPay’s share price jumped 11.9% to close at 23.5 sen today on some 7.8 million shares done.


Keep tabs on inflation risks, investors advised

PETALING JAYA: UOB Asset Management (Malaysia) Bhd cautioned investors to stay alert to any possible rise in inflation, which may adversely affect the value of both equity and fixed income securities, despite the current stock market rally.

“For example, in the near-term, a sudden rise in inflation may heighten uncertainty about the economy, leading to lower earnings forecast for companies and lower equity prices. This is why it is important that investors remain vigilant, even in an equity bull market such as the one we are experiencing now,” said its CEO Lim Suet Ling in a statement today.

She said inflation surprises is among the top risks in 2018, along with a slowdown in China’s growth and geopolitical tensions.

Lim highlighted that greater deceleration in the Chinese economy could trigger concerns of a stronger downturn for global growth given the country’s position as an important export market for many countries.

“Though a slower growth rate in China will not be destabilising the world, geopolitical risks including the conflict over North Korea, tensions in the Middle East and upcoming elections across six European countries this year should be the events to watch in the year ahead.

“As such, we advise investors to exercise caution in 2018 and not get carried away by the market’s strong investment performance in 2017.”

Lim noted that the Malaysian stock market tends to be flat leading up to the general elections, which is expected to happen in March this year.

“However, we think that much of the uncertainty has already played out with Malaysian equities lagging behind their regional peers in the last quarter of 2017. As such, we believe that any overhang from the upcoming general elections should be limited. Historical trends also show that investor confidence tends to rebound after the general elections.”

As interest rates around the world rise, she said fixed income assets will face some headwinds, but in the current global environment of low inflation and modest growth, fixed income securities can still achieve steady positive returns.

UOB favours the Asian stock market, in particular China and South Korea. Sector-wise, it prefers the technology sector including areas such as cloud computing.

“The increasing consumption of technology products and services such as streaming video services and augmented reality will lead to a greater demand for cloud infrastructure and related services. With technology being an increasingly integral part of life, we believe this sector would able to achieve growth even against the wider macroeconomic backdrop.”

UOB remains optimistic about Malaysia’s economic performance over the next 12 months given the positive earnings momentum, recovery in oil prices and expectations for a stronger ringgit against the US dollar.


Axiata takes control of Sri Lanka’s Headstart

PETALING JAYA: Axiata Group Bhd now owns a controlling interest in Sri Lanka’s e-learning solutions provider Headstart (Private) Ltd.

This comes after Headstart had on Jan 18 became a 50.59% subsidiary company of Digital Holdings Lanka (Private) Ltd, which in turn is a wholly owned subsidiary of Dialog Axiata PLC, an 83.32% subsidiary of Axiata Group.

Dialog Group’s investment in Headstart started in 2014 totalling US$640,000 (RM2.52 million) via the subscription of bonds, which may be converted to equity over time.

The first conversion was done in 2015, resulting in Dialog having a 26% stake in Headstart before raising the stake to 50.59% following the conversion of the last tranche of bonds on Jan 1, 2018.

Headstart engages in the business of creating and providing digital education and e-learning solutions under the brand name “Guru.lk”.

Dialog Axiata, listed on the Colombo Stock Exchange, operates Sri Lanka’s leading quad-play connectivity provider.

It is also Sri Lanka’s largest foreign direct investor with investments totalling over US$2.1 billion.

Separately, Axiata told Bursa Malaysia that its wholly owned subsidiary had on January 22 incorporated a new subsidiary, Axiata Global Services Pte Ltd in Singapore to carry out regional business-to-business transactions including shared service support for Axiata Group.


Foreign funds maintain buying momentum on Bursa

PETALING JAYA: Foreign investors continued with the purchase of Malaysian equities for the fourth consecutive week last week ended Jan 19, although the level seems to be gradually decreasing, MIDF Research said.

Based on preliminary data from Bursa, which excluded off market deals, foreign investors acquired RM702.2 million net amount last week, lower than the RM772.2 million net bought in the week before.

“Last week, foreign investors were net buyers on all five trading days,” the research house said in its fund flow report today.

It said foreign buying peaked on Tuesday as foreign investors pumped in RM227.2 million net of funds, tracking gains from Asian markets such as the Kospi, which gained 0.72% and attracted the highest amount of funds during the week at US$307.4 million (RM1.2 billion) net.

Moreover, MIDF Research said the oil prices stood firm at US$69.15 per barrel (pb) despite retreating from its December 2014 high of US$70.26 pb.

However, on Wednesday it said there was a big dip in buying activity as the net inflow retreated to RM37.5 million net, the lowest in a day since Dec 26, 2017.

“We note that on this day, Malaysia bucked the trend as other regional peers, namely Taiwan, Thailand and the Philippines experienced an increase in foreign inflows.” Nonetheless, it said foreign buying regained its momentum on the next two days, hovering above the RM100 million mark.

“The highlight was on Friday, when fears of a US government shutdown were looming, but foreign investors still bought RM111.3 million net on that day, which coincided with the Bursa’s highest daily gain in nine days of 0.4% combined with the ringgit hitting the strongest since May 2016 as markets priced in a probability of a rate hike by the Monetary Policy Committee this week,” it noted.

Meanwhile, it said foreign participation remained active as the foreign average daily trade value (ADTV) stood above the RM1 billion mark for the third week running despite a 20% weekly decline.

The retail ADTV also remained elevated at RM1.76 billion, marking the fourth week above the RM1 billion level, it added.


Amanah Harta Tanah PNB back in the black

PETALING JAYA: Amanah Harta Tanah PNB has returned to the black in the fourth quarter (Q4) ended Dec 31, 2017, after registering a net profit of RM8.99 million against a net loss of RM2.8 million in the previous corresponding quarter, due to unrealised gain on valuations.

The real estate investment trust’s (REIT) revenue for the quarter decreased 17.9% to RM7.62 million, compared with RM9.3 million previously.

It told the stock exchange today that its total expenditure for the quarter reduced by 30% to RM4.61 million, from RM6.59 million in the corresponding period in 2016, mainly due to the deemed financing cost incurred in relation to the acquisition of Mydin Seremban 2.

For the full year, its net profit jumped more than 20-fold to RM17.42 million from RM830,000 a year ago, while revenue grew 41.5% to RM29.92 million from RM21.15 million previously.

On its outlook, the REIT said it forecasts property market activities will be soft this year in view of the downtrend in transaction volumes, challenges in occupancy and sluggish rental reversion upwards.

Taking the scenario into consideration, the REIT said it will continue to improve occupancy rates while injecting new accretive assets with the aim of generating better yields to ensure a sustainable income stream.

The Trust has declared a final income distribution of 2.5 sen a unit for the six month period ended Dec 31, 2017. The amount will be paid on Feb 28, 2018.

Its share price slipped 1.5 sen or 1.84% to 80 sen today with some 47,700 shares done.